Learn These Important Debt Collection Laws And How They Impact Your Business’ Ability To Collect Delinquent Debt

by David P. Montana

When it comes to trying to recover unpaid accounts from your debtors, the myriad of debt collection laws can sometimes feel as though theyre getting in the way. Obviously your main goal is to try and encourage as many late-paying account holders as possible to pay their debts and help keep your business cash flow strong.

Reaching Your Customers - Do you know what the parameters are when it comes to trying to contact your customers? The Fair Debt Collection Practices Act regulates and protects debtors from certain kinds of communications from creditors.

For instance, there are limitations on the hours during the day in which you can contact debtors. There are also limitations placed on where you’re legally permitted to contact debtors as it concerns their past due debts. Be sure to know and operate within these prescribed legal guidelines.

When contacting a third party to try and reach the debtor, you’re also restricted in only asking the third party for information about reaching the actual debtor.

Disputes About Ownership Of The Debt - Sometimes a debtor may deny owing your business any money at all. If this happens then you are obliged to send written verification of the outstanding debt that includes clear payment instructions.

Truthful and Accurate Information - The law requires that you provide debtors with truthful and accurate information. For example, it is a violation to intimate or threaten arresting debtors for delinquent accounts. You can’t represent that you have legal representation, if in fact, you do not. You also cannot insinuate that debtors will be chased after by any governmental authority.

Youre only able to give real information about the debt and your collection methods must abide by the debt collection agency laws at all times. Did you know that for violating the debt collection laws, your debtors could sue you for violation and potentially collect as much as 1 percent of the collectors net worth.

Clearly, its very important that your business fully understand these debt collection laws as they relate to your collection strategies. Collection agency laws go beyond simply getting customers to pay their past due debts.

You should also learn how changes to the Fair Debt Collection Act relates to a customer’s access to credit reporting information. Should the customer wish to verify information contained in their credit report, you will need to ensure that the information you provide is always accurate. Not adhering to these laws, business owners could face fines, and in some instances, the debt owed to them might be discharged.

Debt collection can be a difficult process, but if you understand and stay on top of the debt collection laws and collection agency laws, and how these govern the choices you can take legally to recover the monies owed to you, then you may discover it not so difficult at all.

Knowing what legal actions you can take can also help you with creating and building successful debt collection strategies, wherein you are able to properly communicate with your debtor and recover the debts owed to you.

About the Author:
David P. Montana has been a prominent industry expert, business advisor and writer for over three decades on the subject of collection agencies. He offers more useful tips and resources on debt collection laws.

Published by: David P. Montana on May 30th, 2009 | Filed under Legal



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